How To Fix A Rigged System

In 2002, 98.2% of House incumbents, raising an average of $900,000 apiece, were reelected

Of all the roadblocks to democracy, money -- more precisely, the lack of it -- looms as perhaps the most daunting. Consider the not atypical case of Philip T. Bradley. A year ago, the former GOP chairman of the South Carolina Public Service Commission opted to run for an open House seat. He had name recognition from a 10-year stint in the state legislature and a passel of ideas for economic development and improving schools.

But Bradley, a conservative from Greenville, couldn't turn on the golden spigot. After a yearlong effort produced only $50,000, he quit the race in April. "If you aren't the incumbent or you don't have personal wealth," he laments, "there's almost no hope of winning."

No kidding. A House incumbent in 2002 raised, on average, nearly $900,000 to keep a seat, much of it from vested interests. That's up from $650,000 in 1998. The typical House challenger in the last election raised only $197,000. Incumbents' fund-raising edge is a key reason competition has drained out of congressional races. Some 98.2% of House incumbents won reelection in 2002. Senators are only slightly more vulnerable.

In 2004, megabuck politics will reach new heights. This year's Presidential and congressional elections may cost more than $3 billion, up from $2 billion in 2000. But the problem is not the total amount of cash. It's that too much of it comes from special-interest groups and too little of it goes to challengers. The result is near-guaranteed incumbency in Congress, a lack of fresh blood and new thinking -- and yet another reason for voters to feel the status quo is cast in stone.

Despite the passage of major reforms in 2002 -- changes that banned candidates and parties from raising unlimited "soft dollars" -- most pols remain hopelessly hooked on special-interest cash. As races grow more costly, the money gap between incumbents and challengers is widening. Today, predicting the outcome of an election is a snap. Just check who has the most cash on hand. Says Fred Wertheimer, president of the nonpartisan reform group Democracy 21: "We only have the illusion, and not the reality, of [competitive] elections."

Clearly, there's a need for more reform. But fixing a rigged system is a challenge. It took seven years to pass the Bipartisan Campaign Reform Act, better known as McCain-Feingold, after Senators John McCain (R-Ariz.) and Russell D. Feingold (D-Wis.). The next reform phase, which McCain vows to kick off next year, should aim at helping challengers and wringing even more interest-group money out of elections. Among the top priorities:

1. FIX THE PUBLIC FUND Currently, taxpayers can check a box on their IRS return to send $3 to the Presidential campaign fund. The pool matches the first $250 of every contribution a candidate gets during the primaries. It also pays most of the bills for the general election and the conventions. In exchange for subsidies, candidates must adhere to spending limits during the primaries and refrain from raising private funds during the general election. This year, though, President Bush and John Kerry opted out of primary public financing to spend $300 million on hot-button advertising.

The fund's main problem? It hasn't kept pace with inflation. A total of about $236 million is available for 2004. The cost for both party conventions and the general election alone will run $175 million. That leaves $61 million to cover all the 2004 candidates' primary subsidies -- not nearly enough.

Just as important, the system needs a nationwide public-relations campaign to explain why folks should check the box. Last year only 11% did so. The problem, insists McCain, is that many people view the checkoff as "some kind of political contribution."

What's so great about public financing? Without it, only those able to tap a personal fortune or strings-attached largesse from interest groups are competitive. That forces candidates to rely on huge sums from trade unions, lobbyists, and corporations looking for a return on their "investment."

Doubling the checkoff from $3 to $6 -- and indexing it to inflation -- would produce an additional $200 million over four years. That would permit candidates to get at least $75 million apiece during the primaries, which ought to be sufficient. In addition, the current one-for-one match on the first $250 in contributions could be raised to a four-to-one match to boost the status of small-dollar donors -- the least encumbered source of gifts.

The fund also needs stronger incentives to encourage pols to opt in. Here's one: Nominees who want the $75 million general-election subsidy should also have to accept spending curbs during the primaries. If such a rule were in place today, Bush and Kerry wouldn't be able to have it both ways by relying on private money during the primaries and public funding during the general election.

Another idea to boost competition is compensatory cash: Any candidate facing an opponent who rejects public funding -- and is then outraised by at least 25% -- could get some or all the public money the opponent rejected.

2. BROADEN PUBLIC FINANCING Extending public subsidies to congressional races would be a logical, but controversial, next step. The price could be steep -- as high as $1 billion. But that's small potatoes compared with the cash we lavish on special-interest subsidies and taz breaks. And, insists Wertheimer, "it's a hell of a lot less than our democracy is paying now with privately financed races."

Why extend public financing? Because under the current system, most elections aren't real contests. Out of 435 House races in 2004, only 35 are remotely competitive. House members closed out the 2002 election with an average $340,000 in cash on hand, putting future challengers at a disadvantage from Day One. The average incumbent senator had twice that amount in surplus cash.

3. HELP HILL CHALLENGERS Aside from injections of public cash, there are other ways to weaken incumbents' grip. Because TV advertising is one of any campaign's biggest expenses, the quickest fix is free air time. Local stations should be required to air at least one primary and one general-election debate, plus a minimum number of free or subsidized minutes for office-seeker ads. Broadcast and cable owners would object, of course. But opposition could be overcome if a public fund reimbursed them for some lost airtime.

4. OVERHAUL THE FEC Congress designed the Federal Election Commission to be wimpy, but it has outdone itself with its recent display of indolence. The agency has wrestled all year with the issue of shadow political committees -- so called 527s such as America Coming Together -- that are making an end run around McCain-Feingold by accepting soft money. But the FEC's gridlocked members -- it has three GOP and three Democratic appointees -- opted to defer action on the troubling issue until after the election.

The delay not only flashes a green light to the mostly pro-Kerry shadow committees but also encourages Republican fat cats to set up similar front groups. "I am becoming more convinced that the FEC is simply incapable of enforcing existing law," fumes McCain. "[It is] an absolute and total disgrace."

5. ENCOURAGE SMALL DONORS. Almost unnoticed in the flood of cash pouring into the 2004 Presidential election is the huge increase in contributions from individual donors in chunks of $200 or less. Thanks to Howard Dean, who took in more than half of his $53 million this way, small donors have rediscovered politics. This is good news. Individuals who donate in small amounts are the least corrupt source of campaign cash. While it's true that both Bush and Kerry have gotten the bulk of their money from wealthy givers who can afford $2,000 apiece, both candidates have done extremely well among small donors, too. Bush raised $44 million through Apr. 30 in amounts less than $200, for 22% of his total. And Kerry has taken in $32 million, or 30% of his total, from small givers. Altogether, the 2004 Presidential candidates raised $123 million from small-dollar givers, up from $46 million in 2000. Much of the new money came via the Internet.

To encourage this positive trend, Congress should enact a tax credit that allows small donors to get back up to $100 when they file federal income taxes. Making the tax credit available only if the recipient is participating in public funding would pressure candidates to limit campaign spending. Studies and polls funded by pro-reform groups, including the Campaign Finance Institute, have shown that a tax credit would significantly increase the number of small donors.

Obviously, Round Two of reform won't be easy. And it will require incumbents to give up some of their unfair advantages for the betterment of the nation as a whole.

Idealistic in the extreme? Sure. But long overdue. Political participation is tailing off alarmingly as polarization rises. Unless we modernize, disgust with politics will grow. That's not only bad for America. It's bad for a world community that even in these storm-tossed times still sees this nation as a beacon of democracy.

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